Crude Oil Fails to Join Rally of Commodities

While many commodities rallied on Friday due to the dismal US nonfarm payrolls, crude oil was not one of them. There were a couple of reasons for the poor performance.

One of them was disappointment after yesterday’s meeting of the Organization of Petroleum Exporting Countries members. They have gathered, talked about the possibility of an output cap but achieved nothing. It is unlikely that the theme of production freeze will be brought up until the November OPEC meeting, if at all.

Another problem for crude was the increasing number of US oil rigs. Bakers Hughes reported that US oil rig count rose by 9 this week.

Contract for delivery of WTI crude oil in July fell as much as 1.12% to $48.62 per barrel on NYMEX today. April futures for Brent grade of oil dropped 0.8% to $49.64 on ICE.

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